(SA 24-2021) [2023] NASC (18 July 2023) (1)

Facts

On 2 November 2014 at Windhoek, the parties entered into a written agreement in terms of which the respondent (Grand Trading) had to ensure that the appellant’s bid for a tender issued in respect of the upgrading of a district road from Oshakati to Ongenga was fully compliant. The value of the project was stated to be N$216 800 289,87 inclusive of VAT and it was agreed that if the bid of the appellant (Zhong-Mei) was successful and it was awarded the contract in respect of the tender, Grand Trading would be entitled to an amount of N$6 504 008,69 (plus VAT) in accordance with a timeline set out in the agreement. In terms of the agreement, the payments to Grand Trading had to be made to its bank account at Nedbank. In this agreement, Grand Trading was referred to as the ‘consultant’ and this agreement was at the trial referred to as the consultancy agreement.

The bid of Zhong-Mei was successful, and it was appointed as a contractor in respect of the upgrading of the mentioned road. It thus follows that Grand Trading was entitled to payment to it of the contract amount of N$6 504 008,69 plus VAT in accordance with the payment schedule set out in the agreement.

Grand Trading instituted an action in the High Court in 2018 against Zhong-Mei alleging that, apart from a payment of N$300 000 on 15 December 2015, it had received no further payments. Grand Trading thus claimed the balance outstanding in terms of the consultancy agreement from Zhong-Mei.

Zhong-Mei defended the claim and in its plea to the claim of Grand Trading denied that it owed the latter any amount and averred that it paid the full contract amount to Grand Trading. At the commencement of the trial, Grand Trading amended the amount of its claim to N$5 054 008,69 as it conceded that it had been paid an additional N$1 150 000 in respect of the contract amount by Zhong-Mei.

At the end of the trial, the court a quo found that another N$1 million payment had been proved by Zhong-Mei and gave judgment in favour of Grand Trading in the amount of N$4 054 008,69 plus interest and costs.

Zhong-Mei appealed against the order of the court a quo. 

Issues for determination 

Whether Grand Trading had been paid the full amount stipulated in its agreement with Zhong-Mei and whether Zhong-Mei had proved the payments it allegedly made. This position is succinctly set out in R H Christie and G B Bradfield Christie’s The Law of Contract in South Africa 6 ed (2011) at 449, as follows:

‘When it is disputed whether payment has been made or not, the onus is on the debtor to prove that he has paid, and that his payment relates to the debt in question. If he fails to satisfy the court that there is a sufficiently strong balance of probabilities in his favour, judgment must be given against him. There can be no question of absolution.’

Discussion 

In terms of the agreement, Zhong-Mei was supposed to make payment to Grand Trading’s Nedbank account. This never happened as all the payments by Zhong-Mei were made either to Mr Mumbasha personally in cash; to his private account at First National Bank or to the bank account of a corporation known as Joevani Properties CC. Joevani Properties CC and Zhong-Mei entered into a joint venture agreement on 9 September 2014 in respect of the construction of a head office for the Ministry of Fisheries in Windhoek, which contract was valued at N$42 million in terms of which Joevani Properties CC would be entitled to 70 per cent of the profits generated therein. It is clear from the evidence that the initial contract between Mr. Mumbasha and Zhong-Mei occurred with the then Managing Director of the latter, Ms. Aijun. It further transpired from the evidence that Ms. Aijun and Mr. Mumbasha had developed a relationship over time during which cooperation between her (on behalf of Zhong-Mei) and Mr. Mumbasha (on behalf of Joevani Properties CC) took place on the basis of oral agreements instead of being formalized in writing. This placed Mr Jiang (who took over as Managing Director from Ms Aijun) in an unenviable position of trying to piece these verbal agreements together, and as it happened he could not successfully do this. Mr. Mumbasha admitted in evidence that payments to the tune of N$10 million were made by Zhong-Mei, but he insisted that the vast majority of these payments were in respect of other projects which Joevani Properties CC was involved in with Zhong-Mei including the construction of the Ministry of Fisheries in Windhoek. 

Conclusion

‘[25] It follows that the appeal stands to be dismissed with costs inclusive of the costs of one instructing legal practitioner and one instructed practitioner.’

Held that:

The invoices discovered and dealt with at the trial bear out the evidence of Mr Mumbasha and, apart from the three payments found by the court a quo to be related to the consultancy agreement, none of the other invoices have any reference to Grand Trading or ‘consulting’ but referred to construction work done with most of them directly referring to the Ministry of Fisheries or to Windhoek. Considering the invoices themselves and the uncertainty created as to the manner in which Ms Aijun dealt with Mr Mumbasha, Mr Jiang’s version could not be said, on a balance of probabilities to be the preferred one.

 Although the court a quo made several adverse findings in respect of the evidence given by Mr Mumbasha, it was not such as to advance Zhong-Mei’s case. It was clear that Mr Mumbasha was evasive and even untruthful with regard to the extent of the verbal agreements Joevani Properties CC had with Zhong-Mei (ie his claim in respect of a project in Katima Mulilo which turned out to be false and his less than frank approach for the reasons for the substantial cash payments made to him). These aspects cannot seriously impact his credibility as a witness as no dispute arose over the cash payments paid to him.

There is clear evidence as to the agreements between Joevani Properties CC and Zhong-Mei, (i.e. there was a project in Windhoek for the Ministry of Fisheries which was acknowledged by Mr Jiang and one in respect of the Swakopmund-Uis road as evidenced by a payment by Ms Aijun in respect of another project).

The criticism of the witness, Mr Mushamba, was such that his evidence could not be accepted unqualifiedly, but it did not mean that it could be rejected in total. Much of it was corroborated by documentation and by the evidence on behalf of Zhong-Mei. The criticism of Mr Mushamba is not such as to bolster the case for Zhong-Mei who had to prove every payment to Grand Trading which it managed to do only in respect of the payments so found by the court a quo (the payment of the N$1 million as a result of the criticism of the evidence of Mr Mumbasha). For whatever reason, the procedure followed for payments by Zhong-Mei is such that it cannot be said that more than the three payments identified by the court a quo were proved to be in respect of the consultancy agreement on a balance of probabilities.

As a result, the appeal was dismissed with costs.

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